ETISALAT GROUP Q1 2018 RESULTS PRESENTATION - ABU DHABI, UAE

1

ETISALAT GROUP

Q1 2018 RESULTS PRESENTATION - ABU DHABI, UAE 25TH APRIL 2018

Etisalat Group | Q1 2018 Results Presentation

DISCLAIMER

Emirates Telecommunications Group Company PJSC and its subsidiaries (“Etisalat

Group” or the “Company”) have prepared this presentation (“Presentation”) in good faith,

however, no warranty or representation, express or implied is made as to the adequacy,

correctness, completeness or accuracy of any numbers, statements, opinions or

estimates, or other information contained in this Presentation.

The information contained in this Presentation is an overview, and should not be

considered as the giving of investment advice by the Company or any of its shareholders,

directors, officers, agents, employees or advisers. Each party to whom this Presentation is

made available must make its own independent assessment of the Company after making

such investigations and taking such advice as may be deemed necessary.

Where this Presentation contains summaries of documents, those summaries should not

be relied upon and the actual documentation must be referred to for its full effect.

This Presentation includes certain “forward-looking statements”. Such forward looking

statements are not guarantees of future performance and involve risks of uncertainties.

Actual results may differ materially from these forward looking statements.

2

1. Business Overview

Saleh Al AbdooliChief Executive OfficerEtisalat Group

Etisalat Group | Q1 2018 Results Presentation FINANCIAL HIGHLIGHTS

ETISALAT GROUP FINANCIAL HIGHLIGHTS

Q1 2018 Highlights • Revenue growth Y/Y is attributed to both domestic and int’l operations

• EBITDA growth driven by performance of Int’l operations

• Lower EBITDA margin due to change in revenue mix

• Net profit impacted by higher depreciation charges, taxation and minority interest and lower finance and other income

• Lower capital expenditure attributed to domestic and international operations

4

AED Million Q1 2018 Growth YoY% Growth QoQ%

Revenue 13,104 +5% -3%

EBITDA 6,479 +2% 0%

EBITDA Margin 49% -2pp +2pp

Net profit 2,112 0% +7%

Net profit Margin 16% -1pp +1pp

Capex 1,294 -16% -51%

Capex/Revenue 10% -3pp -10pp

(1) Prior period financial figures are restated to reflect IFRS15 adjustments



• Healthy revenue (+5%) and EBITDA (+2%) growth Y/Y• EBITDA Margin impacted by changes in revenue mix• Improved free cash flow• Results ahead of full year guidance

• Maintained subscribers growth momentum• Stable revenue growth (+3%) despite slower economic activities• Sustained Y/Y profitable growth• Strengthening our digital capabilities

• Maroc Telecom Group improving performance of domestic and int’l operations

• Etisalat Misr maintained double digit revenue growth (+20% in EGP)• Revenue growth in mobile and fixed broadband segments and

ongoing network transformation program in Pakistan

5

2. Financial Overview

Serkan OkandanChief Financial OfficerEtisalat Group



7

Revenue Breakdown Q1 2018 (AED m) EBITDA Breakdown Q1 2018 (AED m)

+5% Y0Y Growth +2% Y0Y Growth

UAE

MT Group (LC+6%)

Egypt (LC+20%)

Pakistan (LC+3%)

+3%

+15%

+21%

-3%

UAE

MT Group (LC+6%)

Egypt (LC+29%)

Pakistan (LC+1%)

-2%

+15%

+29%

-5%

13.1Bn

6.5Bn


Represents others

8


INT’L OPERATIONS FINANCIAL HIGHLIGHTS Q1 2018

Revenue (AED m)/EBITDA (AED m) / EBITDA Margin (%)

Revenue & EBITDA (AED m) / EBITDA Margin (%) / YoYGrowth %


Maroc Telecom Q1 2018 Growthin AED

Growth in MAD

Revenue 3,404 +15% +6%

EBITDA 1,783 +15% +6%

EBITDA Margin 52% Opp Opp

Etisalat Misr Q1 2018 Growthin AED

Growth in EGP

Revenue 663 +21% +20%

EBITDA 262 +29% +29%

EBITDA Margin 39% +2pp +2pp

Pakistan Q1 2018 Growthin AED

Growth in PKR

Revenue 998 -3% +3%

EBITDA 337 -5% +1%

EBITDA Margin 34% -13pp -1pp

1Q’17 4Q’17 1Q’18

9

Etisalat Group | Q1 2018 Results Presentation REVENUE

GROUP REVENUE


Revenue (AED m) and YoY growth (%) Sources of Revenue growth Q1 2018 Vs. Q1 2017 (AEDm)

Revenue by Cluster (1Q’18)

Domestic vs. Int’l International

• In Q1’18 consolidated revenue increased Y/Y by 5% attributed to domestic and Int’l operations

• Growth in the UAE mainly due to higher digital services, handsets and wholesale revenues

• Revenues from international consolidated operations increased by 11%, resulting in 40% contribution to Group revenues, 2pp higher than prior year

— Revenue growth in MT Group attributed to domestic and international operations

— Revenue growth in Egypt attributed to mobile broadband

— Revenue growth in Pakistan negatively impacted by currency devaluation

Highlights

5%4%-3%

UAE60%

Int'l40%

Others0%

MT Group65%

Egypt13%

Pakistan19%

Others3%

Q1’17 Q1’18EgyptUAE MT Group Pakistan Others

10

Etisalat Group | Q1 2018 Results Presentation EBITDA

GROUP EBITDA


EBITDA (AED m) & EBITDA Margin Sources of EBITDA growth – Q1 2018 vs Q1 2017 (AED m)

EBITDA by Cluster (Q1’18)

Highlights

• Q1’18 consolidated EBITDA increased Y/Y by 2% mainly due to International operations.

• EBITDA in the UAE negatively impacted by higher cost of sales and network costs

• EBITDA of consolidated international operations increased Y/Y by 13%, resulting in 37% contribution to Group EBITDA

― Positive contribution from Maroc Telecom Group attributed to Morocco and international operations

― Positive contribution from Egypt due to higher revenues

― Pakistan negatively impacted by currency depreciation

International Domestic vs. Int’l

UAE63%

Int'l37%

Others0%

MT Group74%

Egypt11%

Pakistan14%

Others1%


11

Etisalat Group | Q1 2018 Results Presentation CAPEX

GROUP CAPEX


CAPEX (AED m) & CAPEX/Revenue Ratio (%) Sources of Capex growth – Q1 2018 vs Q1 2017 (AED m)

CAPEX by Cluster (Q1’18)

Domestic vs. Int’l International

In Q1’18 consolidated capex decreased Y/Y by 16% resulting in Capex / Revenue ratio of 10%

Lower capital spend in the UAE focused on network maintenance and digital transformation

Capital expenditure in international operations decreased by 10% and contributed 62% of consolidated Group Capex

― Higher capex in MT Group attributed to network expansion in Int’l markets

― Lower capex in Egypt with focus on 4G deployment

― Lower capex spend in Pakistan with focus on fixed network modernization

Highlights

UAE38%

Int'l62% MT

Group74%

Egypt13%

Pakistan12%

Others1%


12

Etisalat Group | Q1 2018 Results Presentation BALANCE SHEET & CASHFLOWS

GROUP BALANCE SHEET & CASH FLOWS


Highlights

• Maintained strong liquidity position

• Continued net cash position

• Lower operating cash flow due to changes in working

capital

• Higher financing cash flow due to payment of final

dividends for FY2017 and lower net proceeds from

borrowings

Cash & bank Balances 27,125 25,748

Total Assets 128,894 127,180

Total Debt 24,705 24,167

Net Cash / (Debt) 2,420 1,581

Total Equity 58,206 56,835

Investment Grade Credit Ratings Balance Sheet (AED m) Dec-17 Mar-18

AA-/Stable

Aa3/Stable

Cash flow (AED m) Mar-17 Mar-18

Operating 5,251 4,683

Investing (1,519) (1,278)

Financing (194) (4,758)

Net change in cash 3,538 (1,353)

Effect of FX rate changes 10 (22)

Reclassified as held for sales

7 (2)

Ending cash balance 27,231 25,748

13

Etisalat Group | Q1 2018 Results Presentation DEBT PROFILE

DEBT PROFILE: DIVERSIFIED DEBT PORTFOLIO

Borrowings by Currency Q1 2018 (%)Borrowings by Operation Q1 2018 (AED m)

Repayment Schedule Q1 2018 (AED m)Debt by Source Q1 2018 (AED m)

16,402

4,602

1,726 1,438

Group MT Group Egypt Pakistan

15,854

7,304

458 552

Bonds Bank Borrowings Vendor Financing Others

4,7424,241

7,7827,403

1 Yr 2 Yrs 3-5 Yrs Beyond 5 Yrs

14

COUNTRY BY

COUNTRY FINANCIAL

REVIEW

15

UAE: TOP-LINE AND BOTTOM-LINE GROWTH

Etisalat Group | Q1 2018 Results Presentation UAE


EBITDA (AED m) / EBITDA %Revenue (AED m) / YoY Growth (%)

CAPEX (AED m) & CAPEX / Revenue Ration (%)Net Profit (AED m) / Profit Margin (%)

16

Etisalat Group | Q1 2018 Results Presentation UAE

UAE: REVENUE BREAKDOWN AND KEY KPI’S

Mobile Revenues(1) (AED m) Fixed Revenues(2) (AED m) Other Revenues(3) (AED m)

Fixed Broadband(6) Subs (m) & ARPU(7) (AED)Mobile Subs(4) (m) & ARPU(5) (AED)

(1) Mobile revenues includes mobile voice, data, rental, outbound roaming, visitor roaming, VAS, and Digital services (2) Fixed revenues includes fixed voice, data, rental, VAS, internet and TV services (3) Others Revenues includes ICT, Managed Services, Wholesale (local and int’l interconnection, transit and others), Handsets and Miscellaneous (4) Mobile subscribers represents active subscriber who has made or received a voice or video call in the preceding 90 days, or has sent an SMS or MMS during that period(5) Mobile ARPU (“Average Revenue Per User”) calculated as total mobile revenue divided by the average mobile subscribers.(6) Fixed broadband subscriber numbers calculated as total of residential DSL (Al-Shamil), corporate DSL (Business One) and E-Life subscribers.(7) ARPL (“Average Revenue Per Line”) calculated as fixed line revenues divided by the average fixed subscribers.

17

Etisalat Group | Q1 2018 Results Presentation MAROC TELECOM GROUP

MAROC TELECOM: REVENUE GROWTH IN DOMESTIC & INT’L OPERATIONSMorocco, Benin, Burkina Faso, CAR, CDI, Gab on, Mali, Mauritania, Niger & Togo

Subscribers (m) Revenue (AED m) / EBITDA Margin CAPEX (AED m) & CAPEX/Revenue Ratio (%)

CAPEX Breakdown Q1’18Revenue Breakdown Q1’18

Domestic vs. Int’l International Domestic vs. Int’l International

Morocco56%

Int'l44%

Historical subsidiaries

63%

New subsidiaries

37%


Historical subsidiaries

52%

New subsidiaries

48%

Morocco40%

Int'l60%

18

Etisalat Group | Q1 2018 Results Presentation EGYPT

EGYPT: STRONG REVENUE GROWTH WITH IMPROVED MARGINS

Subscribers(1) (m) Revenue (AED m) / EBITDACAPEX (AED m) &

CAPEX/Revenue Ratio (%)

USD / EGP FX Rate (EGP)HIGHLIGHTS

• Regulatory restriction negatively impacted customer acquisitions

• Y/Y revenue growth attributed to mobile data, voice and national

roaming segments

• Improved Y/Y EBITDA margin

• Capital spending focused on 4G deployment

17.5 17.7 17.7

18.2 17.8 17.7

Q1'17 Q4'17 Q1'18

Average EoP

(1) Subscribers figures are based on Etisalat Group definition(2) Prior period financial figures are restated to reflect IFRS15 adjustments

19

Etisalat Group | Q1 2018 Results Presentation PAKISTAN

PAKISTAN: STRONG GROWTH IN SUBSCRIBERS

Subscribers (m) Revenue (AED m) / EBITDA Margin

CAPEX (AED m) &CAPEX/Revenue Ratio (%)

USD / PKR FX Rate (EGP)REVENUE BREAKDOWN Q1’18

PTCL58%

Ufone42%

104.8106.4

111.7104.8

110.5

115.6

Q1'17 Q4'17 Q1'18

Average EoP

20

Etisalat Group | Q1 2018 Results Presentation GUIDANCE

2018 ACTUAL AGAINST GUIDANCE: BETTER PERFORMANCE IN REVENUES WHILE IN LINE WITH EBITDA MARGIN


Financial KPI

Guidance2018 in AED

ActualQ1 2018 in AED

Revenue Growth %

EBITDA Margin%

CAPEX / Revenue %

Slightly lower +5%

49% - 50% 49%

18% - 19% 10%

21

ETISALAT GROUP INVESTOR RELATIONS

Email: [email protected]

Website: www.etisalat.com/en/ir/index.jspr

Documents

ETISALAT GROUP Q1 2018 RESULTS PRESENTATION - ABU DHABI, UAE